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tax free personal allowance for 2009/2010
The payroll screen is showing a PAYE/NI payment of £7.33 due to HMRC when I enter the tax free personal allowance for 2009 of 6,475 in the 'gross total pay' field. I was expecting this to be nil. Am I doing something wrong, or is the system not updated with the new figures?
I’m unsure
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Inappropriate?Hi Melanie
The 09/10 figures (including the personal allowance of £6475) are certainly in the system. Let me take a closer look into this... -
Inappropriate?Melanie,
We've looked into this now, and actually it turns out you do still owe HMRC some National Insurance even when you pay yourself the same as the personal allowance, because the NI Class 1 Primary Threshold is £5715pa (see the official rates here: http://www.hmrc.gov.uk/rates/nic.htm)
Kind of a weird situation I know, and it's expected that these two things will be brought into line in the future, but I guess they've been a little busy recently!
The PAYE calculation is also based on the Tax Code you enter, rather than the personal allowance as such, so for some codes you might find yourself paying PAYE as well.
(a quick note - we're updating our payroll calculator in next week's software release because of a recent inaccuracy we found in dealing with 'K' tax codes. Just so you know.)
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